Will Chase, AMEX, Citi Claw Back Credit Card Signup Bonus Miles or Points?

Will Chase, AMEX, Citi Claw Back Signup Bonus Miles or Points?

 

Will Chase, AMEX, Citi claw back credit card signup bonus miles or points? A TravelSort reader writes “I was just approved for a Chase Sapphire Preferred, 75K AMEX Premier Gold Rewards card and a Citi AAdvantage Platinum Select card. If I cancel any of these cards soon after earning the signup bonus, will any of these issuers claw back the signup bonus? What about if I return an item I bought to meet minimum spend?”

Miles and Points for Returned or Refunded Items Are Usually Clawed Back

As you'd expect, most credit card terms state that the frequent flyer points are earned for purchases, but subtracted for any items or services that are returned or refunded. 

For example, here's the Chase Sapphire Preferred term, bolding mine: “You’ll earn points when you, or an authorized user, use a card to make purchases of products and services, minus returns or refunds.”

Here are the terms for the American Express Premier Rewards Gold card, bolding mine: “Eligible purchases are purchases for goods and services minus returns and other credits.”

And similarly, the pertinent Citi AAdvantage Platinum Select terms state, bolding mine: “AAdvantage® miles are earned on purchases, except returned goods and services, cash advances, convenience checks, transferred balances, credits, fees and interest charges.”

Sometimes, for example in the case of Citi, you may not see an actual claw back after a purchase is returned, but you won't earn additional miles or points until an amount equivalent to your returned purchase is spent on the card.


Signup Bonus Miles and Points Are Rarely Clawed Back

It's clear that Chase, AMEX and Citi all have policies to either claw back miles and points from returned purchases or otherwise not award miles and points for these purchases, but what about signup bonus miles? Typically these are NOT clawed back, even if you cancel your card soon after receiving the signup bonus miles or points.

That said, I still do NOT recommend closing or canceling a credit card right earning the signup bonus, for a few reasons. 

1. Why Risk a Claw Back or Being Blacklisted?

Just because it very rarely happens, why risk your miles or points being clawed back, or worse, being blacklisted by that issuer such that you won't be able to be approved for future credit cards?

2. There's No Need to Cancel a Credit Card So Soon

There's really almost never a good reason to cancel a credit card so soon after getting it. True, some folks have applied for multiple Citi Executive AAdvantage cards and avoided the $450 annual fee by quickly earning the bonus then cancelling the card, but do this often and an issuer could blacklist you, preventing you from getting additional cards from that issuers, thus losing out on miles and points from that bank.

3. Closing Credit Cards Early Can Negatively Impact Your Credit Score

Length of credit history is 15% of your FICO Score (see How Your Credit Score Works). That average age of accounts is ultimately shortened when you close credit cards soon after getting them. Not right away, typically, since a closed credit card in good standing can remain on your report for 10 years. But if you're churning a lot of cards very quickly, without holding on to enough cards to counterbalance this effect, it can mean a dented credit score when those closed accounts fall off your report.

 

For Transferable Points, Points Are Not Clawed Back If They've Already Been Transferred to an Airline Partner

If Chase doesn't like your transfer of Ultimate Rewards points to another user's account, since that user is not your spouse or domestic partner (which is required in the terms), Chase CAN claw back those points. But if you've already transferred the points to an airline or hotel partner, the transfer cannot be reversed. This is the same with AMEX transfers–once transferred to an airline frequent flyer program, they cannot be clawed back, at least I've never heard of any such occurrence.

 

When Canceling a Credit Card You Do Forfeit Miles and Points That Haven't Yet Posted to Your Account

I often hear from worried readers that a credit card rep had told them they'll forfeit all their points or miles earned on the card if they close the card. This is simply not true, if you're reading this to mean all the miles and points you've ever earned from the card. What the rep means is that any miles and points that you would have otherwise earned for spend on our current statement will NOT post to your account once you close the card. You won't, however, lose all the miles and points that have already posted to your account.

What's Your Experience with Claw Back of Miles and Points from Credit Card Signup Bonuses?

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